YTL Corp Wins Bid for Prime Property in Singapore

YTL Corporation Berhad announced today that it has been awarded the tender for the en-bloc purchase of 50 residential units of the Westwood Apartments located on Singapore's famed Orchard Boulevard, for a total cash consideration of SGD435 million. This is the largest residential collective sale transaction since the new en bloc legislations came into force on 4th October. Westwood Apartments is a condominium development strategically located on the Orchard Road shopping and entertainment belt and within easy access of several stations on Singapore's efficient Mass Rapid Transit system. YTL Group Managing Director Tan Sri Dato' (Dr) Francis Yeoh Sock Ping, said, "The opportunity to develop prime, iconic properties that speak to the YTL brand is a very exciting one. This acquisition, our third land acquisition in Singapore in the last 2 years, is well in line with our wider strategy, focusing on upscale real estate in well-established markets, which enables us to employ our branding to enhance the value of these properties". "In the last 2 decades, the YTL Group has worked towards elevating the standard of upmarket lifestyle concepts in this region of the world to a standard that Asia deserves, through the development of hotels, villas and retail and residential properties. Southeast Asia, with its vast coastal areas, natural beauty and pristine waters, has largely untapped potential to become the Mediterranean or Caribbean of the East. Our focus continues to lie in developing the very finest in luxury homes, hotels, marinas and other real estate, architecturally designed and crafted to a world-class standard of excellence, and which blend ecologically with their natural surroundings to preserve the environmental value of these areas." Apart from geographical diversification and increase in YTL Corp's existing property development landbank portfolio in Singapore, the proposed acquisition will enable the Group to enhance its earnings potential from the high sale and rental rates expected from the renewed interest in the property sector in Singapore. The Group will be able to leverage on its existing local market knowledge, expertise and resources derived from its current involvement in the high-end Lakefront and Sandy Island residential development projects in Sentosa Cove, Singapore, which will comprise exclusive, bespoke homes. "Recent sales of well-designed branded properties amongst high net-worth individuals reflect the positive sentiments of the property market in Singapore. For example, the Ritz-Carlton Residences were recently sold for as high as S$5,000 psf, a reflection that Singapore is primed for growth in the indulgent property sector," said Michael Ng, Managing Director of Savills Singapore.

Esso to spend RM38 million on retail network

Esso Malaysia will invest $10.9 million to expand its retail network in Malaysia in 2007, which will include building at least six new petrol stations.
The company would acquire sites and construct new stations in high growth areas, such as the Klang Valley, Johor Barn, and Penang.
Esso currently operates a total of 284 service stations, while its affiliate, Mobil, runs more than 200 stations, nationwide.

Synergy seen rising 6-7% on market debut

SHARES in Malaysia’s Synergy Drive, whose interests range from palm oil to engineering, could rise 6-7 per cent on their debut on Friday, but plans for big investments beyond its core businesses may saddle it with debt, clouding its outlook.State-controlled Synergy Drive, formed from a merger of conglomerate Sime Darby and two other planters, Golden Hope and Kumpulan Guthrie, has profited as prices of palm oil, used for food and fuel, have more than doubled since January 2006.The company, valued at more than US$16 billion, will be Malaysia’s biggest listed firm and the world’s second-biggest planter by value after Singapore’s Wilmar International Ltd, which is worth US$18.2 billion.But some analysts are concerned that plans to invest up to RM21 billion (US$6.24 billion) to take 60 per cent stakes in the mammoth Bakun hydroelectric dam and the construction of undersea cables may place the debt-free Synergy under financial strain.“People are a little worried about Synergy Drive’s taking a stake in Bakun,” said a fund manager, who declined to be named.“Without Bakun, Synergy would have had a sterling debut, but now we think it’s going to be muted: Perhaps 6-7 per cent up, but definitely less than 10 per cent. Their getting involved in non-core assets is worrying.” Synergy’s shares will start trading at RM8.90, or about 21 times current year earnings, in line with the broader Kuala Lumpur Composite Index.The price is at a generous discount to pure-play plantation company IOI Corp Bhd, which trades at almost 26 times earnings and Wilmar, at 31 times.“Synergy Drive is not a pure-play plantation company so you can’t compare it with IOI or Wilmar,” said OSK Research analyst Tursina Yaacob, who has a 12-month price target of RM13.65, or around 29 times fiscal 2008 earnings.“We like the management and its shareholder, (state asset firm) Permodalan Nasional Bhd, and we think there will be investor interest because it’s a core heavyweight holding.” Synergy Drive had net profit of RM2.63 billion on sales of RM28.22 billion in the year to end-June, according to proforma accounts in its sale prospectus.Synergy gave no forecasts, but OSK Research estimates fiscal 2008 net profit will rise 5 per cent to RM2.75 billion.The firm has said it is aiming for an improvement of as much as RM500 million in earnings before interest and tax annually from July 2009, with an estimated 80 per cent of the cost and revenue synergies coming from the plantation unit.

Citi to sell $7.5 Billion of equity units to the Abu Dhabi Investment Authority

NEW YORK, Nov 26, 2007 (BUSINESS WIRE) -- Citi announced today that it has reached an agreement to sell Equity Units, with mandatory conversion into common shares, in a private placement to the Abu Dhabi Investment Authority (ADIA), a long-term investor committed to the U.S. capital markets, in the amount of $7.5 billion. ADIA's aggregate ownership in Citi's common shares, including the conversion of these Equity Units, will total no more than 4.9% of Citi's total shares outstanding.
"This investment, from one of the world's leading and most sophisticated equity investors, provides further capital to allow Citi to pursue attractive opportunities to grow its business," said Win Bischoff, Citi's Acting Chief Executive Officer. "It builds on a series of actions we have taken over the past several months to strengthen our capital base, which have included sales of certain non-strategic assets, the issuance of trust preferred securities, and the previously announced plan to use common stock to purchase 32% of Nikko Cordial in Japan. In addition, ADIA is a significant participant in alternative investments and emerging markets financial services, two areas in which we have major positions and have been expanding.
"This investment also enables us to access capital in an efficient manner, and is consistent with our strategy of maintaining a balance sheet that benefits from highly diverse sources of funding in terms of both geography and type of security," Mr. Bischoff continued.
"Citi possesses a unique position in the financial markets throughout the world. We see in Citi a highly respected company with a premier brand and with tremendous opportunities for growth," said ADIA's Managing Director, Sheikh Ahmed Bin Zayed Al Nahayan. "This investment reflects our confidence in Citi's potential to build shareholder value."
ADIA has agreed not to own more than a 4.9% stake in Citi, and will have no special rights of ownership or control and no role in the management or governance of Citi, including no right to designate a member of the Citi Board of Directors.
Substantially all of the investment proceeds will be treated as Tier 1 capital for regulatory capital purposes. Accordingly, it will support Citi's progress toward its goal of achieving its targeted capital ratios by the end of the first half of 2008. The investment is expected to close within the next several days.
Each Equity Unit is mandatorily convertible into Citi shares at prices ranging from $31.83 to $37.24 per share. The Equity Units convert to Citi common shares on dates ranging from March 15, 2010, to September 15, 2011, subject to adjustment. Each Equity Unit will pay a fixed annual payment rate of 11%, payable quarterly. The payment rate reflects market terms based on the conversion premium as well as Citi's current dividend yield. Additional details of the Equity Units are provided in an attachment to this release.
The Abu Dhabi Investment Authority (ADIA) is a well-established, well-respected institutional investor committed to the stability of the global financial infrastructure. It is the sovereign wealth fund of the government of Abu Dhabi, one of the seven emirates that comprise the federation of the UAE.
Citi, the leading global financial services company, has some 200 million customer accounts and does business in more than 100 countries, providing consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, and wealth management. Citi's major brand names include Citibank, CitiFinancial, Primerica, Smith Barney and Banamex. Additional information may be found at www.citigroup.com or www.citi.com.
Certain statements in this document are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act. These statements are based on management's current expectations and are subject to uncertainty and changes in circumstances. Actual results may differ materially from those included in these statements due to a variety of factors. More information about these factors is contained in Citigroup's filings with the Securities and Exchange Commission.

MIER maintains growth 5.40% for 2008

KUALA LUMPUR, Nov 27 (Bernama) -- The Malaysian Institute of Economic Research is maintaining its downward revision of a 5.4 percent growth next year from 5.8 percent projected earlier, but says a recession in the U.S. economy could make matters worse.Growth projections for this year is maintained at 5.7 percent.The revised figures were also in light of the International Monetary Fund's downward revision of global economic growth, MIER's executive director Mohamed Ariff Abdul Kareem, said here today.Although domestic demand would be propped up somewhat prior to the general elections, the global economy could grow at a slower pace owing to the fallout from the subprime turmoil, he said.He said that the spurt in oil prices was another factor which has the potential to derail the global economy.Oil prices have been skyrocketing to record levels of almost US$100 per barrel.However, he said that with the expected rebound in the global economy in 2009, the Malaysian economy could shift towards its potential growth path, expanding by 5.7 percent.MIER, however is maintaining 5.7 percent growth forecast for 2007.

IOI denies considering Unico stake

KUALA LUMPUR: Plantation giant IOI Corp Bhd has denied claims that it is considering purchasing a controlling stake in Unico-Desa Plantations Bhd.
Chairman Tan Sri Lee Shin Cheng said reports that IOI had shown interest in buying the stake were false.
“We have not made any offer to purchase (the stake). We have not had any expressions of interest, nothing,” he told a press conference yesterday.

Tan Sri Lee Shin Cheng“However, if Unico made an official offer to sell its stake (in Unico-Desa), then we will consider. Otherwise, we are not interested,” he added.
Unico Holdings Bhd, Unico-Desa's parent company, had at its AGM in September passed a mandate to undertake a capital-reduction exercise and distribute 29.3% of Unico-Desa's shares to its shareholders.
The mandate did not sit well with ousted director Tan Kai Hee, who publicly voiced his opinion via several Chinese newspapers.
Associated Chinese Chambers of Commerce and Industry of Malaysia president Tan Sri William Cheng, playing the role of mediator, stepped in and met with the Unico group's board members and Tan to resolve the issue.
Cheng had proposed a solution – sell off a total 57% stake in Unico-Desa en bloc (as opposed to the 29.3%), which would fetch a better premium.
When news of Cheng's proposal (to sell a 57% stake) hit the market, speculations were rampant on a potential takeover, with IOI headlining the rumour list. So strong were the speculations that Unico-Desa's stock soared.
Late last week, Unico group's board of directors held a press conference to announce that it had initiated defamation proceedings against Tan and also to set the record straight about the takeover, at least on Unico's part.
Unico group chairman Tan Sri Lim Guan Teik had then confirmed the group was going ahead with the mandate approved at its AGM and that it would carry on with the capital-reduction exercise.
He also confirmed that the group never received any offer to purchase the (controlling) stake in Unico-Desa either from IOI or anyone else, but said that the group would consider the option (to sell) if it received a “good offer.”

Power player at home and beyond

WAY back, on September 29 1992, when Peninsular Malaysia was plunged into a nine-hour blackout, two civil engineers and a marketing man saw the light in power plant construction.
Tan Cheng Huat, Lam Kar Keong and Albert Chang were then building workers' quarters for Tenaga Nasional Bhd (TNB) at the Kapar power station near Port Klang.
The humiliating blackout jolted the government into fast-tracking the appointment of independent power producers (IPPs) and, consequently, the construction of more power plants.
When the government announced plans to build power plants, Zelan seized the opportunity.
"In those days of building the workers' quarters for TNB, we also got to know the power plant equipment suppliers and learn about the civil engineering works for power plants.
"We started off sub-contracting for small jobs with Asea Brown Boveri, the leader in making gas turbines," Lam said.
He recalled that within a year of the major outage, three power plants were built in Connaught Bridge (Klang), Paka (Terengganu) and Pasir Gudang (Johor). From there, Lam said, he and his friends earned the trust of TNB.
"We also worked very closely with power generating equipment suppliers. They needed a local partner to stabilise project risks and we knew the ground very well. Therefore, we matched each other," he said.
Looking back, Lam summed up the first defining moment for the business as "being at the right place at the right time".
While it seemed that good luck played a role in the beginning, it was undoubtedly good planning that earned Zelan its reputation as a reliable power plant contractor.
"We strive to do things right the first time round. That way, the greater the probability of us delivering the job on time and within budget," Lam told Business Times during a visit to the Tanjung Bin power plant in Johor.
He said the recently completed project has been a launching pad for Zelan in gaining international recognition as a full-fledged engineering, procurement, construction and commissioning (EPCC) specialist.
Among the company's ongoing projects are two 300MW coal-fired power plants in Chhattisgarh, India. It is halfway through completing the RM320 million project.
In Saudi Arabia, Zelan is undertaking two power and water desalination projects worth RM1.03 billion in Shoaiba and Shuqaiq.
Zelan is also busy with two projects in the United Arab Emirates (UAE). In Dubai, it is building a 45-storey office and service apartment block for RM308 million. In the capital city of Abu Dhabi, Zelan is teaming up with IJM Corp Bhd, Sunway Builders Sdn Bhd and LFE Engineering Bhd to carry out construction works worth RM1.4 billion in the Al-Reem development.
"We started to get big jobs in Indonesia and Saudi Arabia when potential clients saw our progress with the RM5.7 billion Tanjung Bin power plant. This project actually put us on the global map as an EPCC specialist," Lam said.
Of the RM5.7 billion, Zelan did the civil works amounting to RM1.4 billion while its Japanese partner Sumitomo Corp supplied the generator, turbine and boiler.
"It took us almost 10 years to build a job bank of RM1 billion, but with the Tanjung Bin project, prospective clients see that we have the technical expertise and financial muscle to take on big jobs."
Zelan completed the Tanjung Bin job in 38 months, ahead of the average construction time-frame of 48 months, and was rewarded with a performance bonus.
To date, Zelan has built 16 power plants, but does not own any concession to operate either a power or water supply plant.
However, things are about to change. Zelan is tendering to build and operate power generation and water desalination plants in emerging economies outside Malaysia.
"We're ready to take on the role of an independent power producer or an independent power and water producer," said Lam, the managing director of Zelan Construction Sdn Bhd.
The group has earmarked up to RM2 billion to buy shares in electricity producers, possibly in Indonesia, Vietnam, India or the UAE.
"We can easily finance half of the RM2 billion with our own funds. The other half could be funded via share placements or bonds.
"Although we're looking into greenfield concessions, we're not averse to brownfield ones. If there are existing concessions that have a lot more years to go and the price is right, why not," Lam said.
Greenfield concessions are upcoming power plants which have yet to yield any earnings, while brownfield units are existing ones receiving money as they sell electricity to clients.
Asked if Zelan is eyeing any brownfield concessions in Malaysia, Lam replied: "It is almost impossible because everyone wants to sell high."
Currently, Zelan's outstanding construction jobs amount to RM5 billion.
"We've had to turn away some job offers because it is more important to deliver what we promise. What we have in hand now will keep us busy for another three years," Lam said.
Lately, Malaysia's construction sector has started to grow again, after shrinking in 2004, 2005 and 2006. The industry, which had retrenched staff during that period, began experiencing a "brain drain" as a result of the aggressive hiring by companies which had secured major contracts, especially for their overseas projects.
"The job market has changed for the better. Sometimes, we cannot avoid a 'brain drain', but we believe in empowering deserving staff with the right opportunities. It is not about giving higher salary; it is also about keeping key staff in the loop of the group's decision-making," Lam said.
"I can confidently say that we've groomed our second-tier leaders. They are a committed team. Zelan is ready to be an integrated player in the global market of power and water supply," he added.

IJM Prop unveils RM6.5b Penang waterfront project

IJM Properties Sdn Bhd is set to transform Penang into a world class economic and residential hub with the unveiling of its project, The Light Waterfront Penang.IJM Corp Bhd chief executive officer/managing director Datuk Krishnan Tan said the RM6.5 billion mixed residential and commercial development is the island’s first integrated waterfront city and would be built on part of the 137 hectares of reclaimed land along Penang’s eastern coastline.“The Light will feature 62ha of breathtaking development on the reclaimed land and will be developed in three phases,” he said at ceremony to unveil the project in Penang today.Under phase one, covering 17ha, six parcels of high-end waterfront residences, comprising 1,186 units, would be developed.“The development is expected to be completed in three to five years,” he said.Tan said under phase two, a commercial and retail city, comprising Gateway Towers, hotels, signature offices, showrooms, banquet and conference facilities, cultural hall, visitor centre and waterfront amphitheatre would be developed on 41.7ha.“One unique feature of the city is the floating stage and a floating restaurant. The entire city will also be interconnected by water taxis,” he said.He said The Light would also feature three ha of seafront park under phase three of the development.Tan said the project, which will developed by IJM Properties Sdn Bhd’s subsidiary, Jelutong Development Sdn Bhd, is expected to be completed in 2017.“Land reclamation is in progress and construction will start by the end of next year,” he said.

Ranhill unit gets RM300m Libyan earthwork job

RANHILL Bhd's Amona Ranhill Consortium Sdn Bhd has been awarded a 105.81 million Libyan dinar (US$88.16 million or RM297 million) advanced earthworks contract in Libya.
The contract from the Libyan Housing and Utilities Board is in relation to a housing project in Tajura district, Tripoli, which will comprise 10,680 units.
In a statement to Bursa Malaysia, Ranhill said the scope of works under the contract include the mass excavation and fill to the whole of the Tajura housing project.
The contract period is 20 months and work has commenced at site.
"The implementation of works pursuant to the advanced earthworks contract shall be sourced from advanced payment and progress payments," Ranhill said in a statement to Bursa Malaysia Bhd.

RM2.2b bid to take Magnum private

MULTI-PURPOSE Holdings Bhd (MPHB) has partnered a private equity firm to launch a RM2.2 billion bid to take Magnum Corp Bhd, a gaming company, private.
The deal is an opportunity for MPHB to bring in CVC Asia Pacific Ltd to enhance the future performance of Magnum, MPHB said in a statement to Bursa Malaysia yesterday.
MPHB and CVC signed a heads of agreement for the deal yesterday. They have until February 20 to sign a definitive agreement.
"I believe this partnership will accelerate our growth over the long term, leveraging on CVC's international experience and networks," MPHB managing director Datuk Surin Upatkoon said in the statement.
This would be the second investment by CVC in Malaysia. In March, CVC led investors to buy Genting Bhd's paper and packaging business for some RM745 million.
Under this latest deal, a special purpose vehicle (SPV) will be set up where MPHB will hold 51 per cent and funds managed by CVC will have the rest.
MPHB, which holds 55.54 per cent of Magnum, will pay the remaining shareholders RM3.45 a share, a 12 per cent premium to its pre-suspension price. It will fund this with interest-free loans from the SPV and borrowings from Magnum.
Once MPHB gets full control of Magnum, it will then sell it to the SPV. It did not say how much CVC will invest for the 49 per cent stake.
As part of the deal, Magnum will also make a general offer for the 1.75 per cent stake it does not own in Magnum 4D Bhd at RM3 per share or a total of RM8.8 million.
However, the offer price of RM3.45 for Magnum was below what most analysts have cited as their fair value for the stock.
Nine out of 16 analysts have higher target prices, according to data compiled by Bloomberg.
Among others, OSK Research values Magnum at RM4, while ECM Libra pegs the stock at RM3.86.
This means that investors may not rush to accept the offer.
"It would seem too low a price to accept," said an analyst who declined to be named.

SapuraCrest bags RM505m contract

SAPURACREST Petroleum Bhd has bagged a US$148 million (RM505 million) regional contract for works within the Malaysia-Thailand Joint Development Area (MTJDA).
The job was awarded to its subsidiary, TL Offshore Sdn Bhd by the Carigali-PTTEPI Operating Co Sdn Bhd.
Work will include transporting and installing of platforms, including jackets, decks and building bridges and inter-field pipelines, for the JDA Block B-17 Field Development Plan Project located in the MTJDA.
It is targeted to begin at the end of the third quarter of 2008 with completion expected in the third quarter of 2009.
"We would like to thank CPOC for this award. We are developing a partnership with them as our drilling unit is already providing services on a long term contract and this major win extends the scope of work we are offering to now include the installation of their offshore facilities," SapuraCrest executive vice-chairman Datuk Shahril Shamsuddin said in a statement released in Kuala Lumpur yesterday.
The MTJDA is an area of overlapping continental shelf claimed and jointly developed by both Malaysia and Thailand.
It is approximately 7,250 sq km in size and is located in the lower part of the Gulf of Thailand.
This is SapuraCrest's second operation in the area following an earlier US$120 million (RM403 million) month drilling contract secured in January 2006.
Both successful bids come amid the company's long term development programme to further enhance its regional capabilities.
SapuraCrest is involved in supporting oil and gas field development in a variety of projects spanning Malaysia, Indonesia, Thailand, Russia, Australia and India.
"These investments by SapuraCrest Petroleum are geared towards actively sustaining, developing and acquiring the right resources, technologies, human capital and assets to provide the region's energy industry with the solutions that they need to develop increasingly complex shallow and deepwater oil and gas fields," Shahril said.

YTL Power to issue RM2.2b bonds

MALAYSIAN power producer YTL Power International Bhd plans to issue up to RM2.2 billion (US$651 million) in bonds with up to RM2.23 billion detachable warrants, the company said today.
The bonds would allow YTL Power to raise funds for future investments and projects, and for potential refinancing of existing borrowings, it said in a statement.

DiGi to spend RM800m on 3G rollout

MOBILE phone operator DiGi.Com Bhd plans to invest up to RM800 million under a three-year plan to provide services like faster video downloads and Internet access.
The company is buying the necessary airwaves from Time dotCom Bhd in an all-share deal worth some RM655 million.
It will also partner Time dotCom to develop new products and share transmission towers, among other things.
"This is a fair deal," chief executive officer Morten Lundal said in a briefing in Kuala Lumpur yesterday. Time dotCom obtained the spectrum from the government for some RM50 million.
Lundal said the price DiGi is paying is fair due to the benefits it will get from the airwaves over the long term.
DiGi will also spend another RM150 to RM200 million in capital expenditure to set up the network infrastructure for third-generation telecommunications services next year.
It will use internal funds to roll out the network.
Meanwhile, Time dotCom chairman Datuk Wan Muhamad Wan Ibrahim said the company is eyeing a five per cent stake in DiGi.
"We want to be a substantial shareholder in the company," Wan Muhamad said.
He said the company hopes to buy another 1.5 per cent stake through Digi's book-building exercise, which started yesterday.
Time dotCom will have 3.5 per cent stake and board representation in DiGi once a definitive agreement on the alliance is signed in two-and-a-half months.
For Time dotCom, the deal will create additional revenue of between RM10 million and RM15 million a year as it leases out its fibre optic network to DiGi.
Time dotCom and DiGi will also develop a knowledge-sharing programme for human capital development and conduct joint studies to identify and develop additional areas of cooperation.
According to Time dotCom managing director Datuk Baharum Salleh, DiGi and Time dotCom have already started discussions on how the products, research and network of the two companies can work together.

Malaysia's GDP to grow 5.9pc in 2008: World Bank

BANGKOK: The World Bank says the outlook for the Malaysian economy in 2008 is more positive with a 5.9 per cent growth rate but feels the prospects also depend largely on how significantly economic conditions in the US worsen in the coming months.It says the sub-prime crisis appears to have had a limited effect on the Malaysian financial sector so far, although its impact on export performance could be more significant over time.The World Bank’s latest East Asia & Pacific Update shows that Malaysia’s real GDP (gross domestic product) growth in 2007 is expected to moderate to 5.7 per cent, after growing 5.9 per cent in 2006.“Although export performance has so far been weak in 2007, domestic demand should help to sustain growth. Strong private consumption is likely, given favourable consumer sentiments, low inflation, high commodity prices, stable interest rates and a recent pay hike for government officials,” World Bank says.Similarly, an expansionary fiscal policy, following the Budget 2008 announced in September, should also strengthen growth, it adds.The Update, a six-monthly report on the region’s economic and social health, finds that growth in emerging East Asia is expected to exceed eight per cent in 2007 for a second year in a row and to moderate only slightly in 2008, despite growing concerns about the US sub-prime crisis and increasing global oil prices.Among the East Asian countries, China is expected to grow by 11.3 per cent in 2007 before slowing modestly to 10.8 per cent in 2008 while Vietnam is to grow by 8.2 per cent next year compared to 8.3 per cent this year.Cambodia is likely to achieve 8.0 per cent growth in 2008, Laos 7.9 per cent, Indonesia 6.4 per cent, the Philippines 6.2 per cent and Thailand 4.6 per cent.Although East Asian exports to the US have already slowed, more buoyant investment and consumption in China and other countries have allowed growth to remain strong and even pick up this year, says the World Bank.The report finds that for the first time, the number of poor people living below US$2 a day in East Asia has fallen below 500 million, down from one billion in 1990.The Update cautions that new highs for oil prices will test the solidity of the East Asian and global economic expansions in 2008, stating that an average oil price of US$90 in 2008 will be associated with an income loss in East Asia of a little over one per cent of GDP.The report’s lead author, Milan Brahmbhatt, says: “The impact of the US sub-prime crisis and the renewed surge in oil prices have clearly increased downside risks.“Nevertheless we expect the stronger growth momentum in the region to carry through 2008.”The Update also says that although China has become a major export market for the rest of East Asia, economies need to remain focused on finding new ways to meet China’s ever changing and highly competitive market.“The new challenge for China’s East Asian neighbours will be in making the transition from supplying inputs for China’s exports to also supplying its domestic market, something that may require significantly different research, production, branding and marketing skills and channels,” Brahmbhatt says

Salcon unit gets RM36m Zecon Water job

Salcon Bhd’s wholly-owned subsidiary, Salcon Engineering Bhd (SEB), has won a contract for the construction of Petaseh intake pumping station in Negri Sembilan and associated mechanical and electrical works.In a statement today, Salcon said the RM36.12 million contract from Zecon Water Corp Sdn Bhd, a subsidiary of Zecon Bhd, is expected to be completed over a period of 30 months.Zecon was recently appointed the main contractor of the project.SEB chief operating officer How See Hock said the contract would add positively to its construction order book.Salcon is a total water and wastewater solutions provider, offering technical and management capability, as well as advanced technology and expertise in the water and wastewater industries

DiGi &Time dotCom form alliance

MALAYSIA'S mobile phone firm DiGi has agreed to form strategic and equity tie-ups with broadband telecommunications firm Time dotCom Bhd, allowing DiGi access to Time’s prized 3G spectrum.State-controlled Time said it also received an offer from DiGi’s parent, Telenor, to buy a stake in DiGi via a share placement to help DiGi comply with Malaysian equity rules. Both companies have announced the alliance in statements to Bursa Malaysia today. - Reuters

Scomi Marine revenue RM118 million in Q3

KUALA LUMPUR, Nov 12 (Bernama) -- Scomi Marine Bhd revenue for third quarter ended Sept 30, 2007 rose to RM118 million from RM110 million in the same period last year.In a statement here today, Scomi Marine said the revenue represented an eight percent increase compared to the corresponding quarter in 2006."The rise was largely due to the rates revision from the marine logistics business and also increased contribution from the offshore support services division," it said.Scomi Marine said the marine logistics division remained the major revenue generator with an 86 percent contribution, due to the size of the fleet in operations under this business.It said net profit, however, fell 44 percent lower compared to the same quarter in 2006."This is due to higher docking costs for the marine logistics division and higher gain on vessel disposal for third quarter 2006," it said.Net profit for third quarter fell to RM15.966 million from RM26.404 million previously.Scomi Marine is an associate company of Scomi Group Bhd, which is involved in four core businesses -- namely Oilfield Services, Energy & Logistics Engineering, Energy Logistics and Production Enhancement.

Fuel price-to terms reality

KUALA LUMPUR, Nov 13 (Bernama) -- Malaysians will be ushering 2008 probably with much anxiety, as there are already indications that a rise in the price of fuel is inevitable.But just how much the increase will be in 2008 after the government kept its word that there won't be any increase in 2007? It's certainly difficult to speculate on the quantum increase but Malaysians certainly have to face higher cost of living.Malaysian consumers have every reason to feel anxious as they have already seen a series of price hikes relating to essential items during the current year with the latest being the rise in flour prices that in turn pushed up the bread prices between 10 sen and 30 sen effective 1 November.Prime Minister Datuk Seri Abdullah Ahmad Badawi had made it clear that government would review the existing petrol and gas subsidy mechanism looking at the current scenario.
DIFFICULTY IN SUSTAINING PRICES
Its definitely burdensome for the government to continue maintaining the current retail price of fuel when crude oil prices in the global market are about to surpass the the US$100 (about RM334) mark per barrel.Though the rising prices in the international market may have benefited Malaysia, a net exporter of petroleum, the fuel subsidy is depleting the national coffers.According to the Federation of Malaysian Consumer Associations (FOMCA) Communication Director Mohd Yusof Abdul Rahman, any increase in the price of crude oil means the government has to spend more on subsidising petrol, diesel and liquefied petroleum gas (LPG) to keep their retail prices low.As for the first eight months of this year, the government had to cough out subsidies worth RM16 billion to maintain the retail prices of fuel in the domestic market while the price of crude petroleum went up to unprecedented levels.Currently in Peninsula the retail price of premium petrol RON97 is RM1.92 per liter, RON92 RM1.88 per liter, diesel RM1.581 per liter and LPG RM1.75 a kilogram.
NO ALTERNATIVE
As fuel is the enabler for transportation and manufacturing activities, thus any increase in its prices will definitely impact both sectors.According to Mohd Yusof, the effect on both sectors in turn would bear upon the prices of goods and services down the line, which has to be borne by the consumers."Looking at the people's reaction following the 30 sen per liter increase in 2006, what worries them is the transportation cost that would also indirectly impact the cost of goods and services."What more when consumers are left with no choice but to use their own transport to commute to their workplace or for other purposes," he said referring to the public transportation that is still unsatisfactory.If the people had a choice, say they could opt for a reliable public transportation system or natural gas vehicles (NGV), then they may not react negatively on the fuel price hikes."Currently most of the NGV are taxis. If Malaysian made cars like Proton and Perodua come up with vehicles with both petrol and natural gas tanks, they will provide great savings for vehicle owners," said Mohd Yusof.
MISSUSE OF SUBSIDY
On the fuel subsidy, Mohd Yusof opined that it was only appropriate for the government to review the petrol and diesel subsidy."Currently the petrol subsidy is enjoyed by all private vehicle owners including the high heeled who don't deserve the subsidy."The subsidy is also enjoyed by foreigners like Singaporeans who refuel in Johor Baharu and the Thai who procure fuel supply in Perlis and Kelantan," explained Mohd Yusof.Even the fishermen who enjoy a RM1 subsidy for every liter of diesel are known to abuse the privilege by selling the subsidized fuel in the black market."A study conducted by the Agriculture and Agro Based Industries Ministry clearly indicated a rise in the sale of subsidised diesel but the catch is on the decline. Therefore, the subsidy doesn't serve its intended purpose," he said.Mohd Yusof noted that as the government has to bear high subsidy cost and tax relief on fuel, thus its only appropriate that the subsidy is utilised to upgrade public transport, health and education facilities.
HAVE TO BE BORNE TOGETHER
Meanwhile, FOMCA's adviser Dr Hamdan Adnan said Malaysians have to accept the rise in fuel prices with an open heart and bear in mind that the government has been subsidising fuel prices all this while."Regardless of what happens we have to keep up with the current developments. The government should not be blamed; it is due to the oil prices in the global market," he said.The government can only provide a small portion of subsidy and the rest must be borne by the people.Dr Hamdan pointed out this is definitely difficult as of late the consumers had to bear a series of price hikes involving various goods."They are increasingly burdened. The feel good factor is no more there," said Dr Hamdan.The people too are concerned with the development as sooner or later the price of other goods too will rise. What more when the toll rates on the highways are expected to go up in the New Year."Therefore we hope that even if the government rises fuel prices, the increase won't be excessive as it will only worsen inflation," he said.The inflation rate is reported to have gone up by 2 percent compared to five percent last year.
STEPS TO CONTROL PRICES
The government has been advised to take necessary steps to ensure there is no unreasonable increase in prices of goods or services when the prices of fuel goes up.According to Dr Hamdan, the government must ensure this looking at the fact many parties, including the transport operators, would be lobbying with the government to hike up prices."We don't want a situation where government servants have to seek another pay hike and it is a known fact that the rise in salary only gives rise to a never ending inflationary cycle," he explained.However, Dr Hamdan noted that Malaysians must count on their blessings because despite promoting capitalism and free trade, the government also regulates the prices of necessities.At the same time, he also said that the consumers should not forget that the trader too has to make a living but the government has to cap the profit margin for price controlled items."I hope that the government would be able to cooperate with the non governmental organisations (NGO) in this respect," he added.
CHANGE YOUR WAYS
In what ever situation, the attitude is the one that will decide whether the hike in fuel prices will badly affect the consumer's financial position. Whether we are prudent in our spending or splash the money beyond our means will be the deciding factor.As pointed by Dr Hamdan, Malaysians can no longer afford to spend as they liked and have to come to terms with reality and build up resilience."We have been in the comfort zone for far too long. This comfort zone would shrink further in the new year," he explained.Apart from being prudent and seeking additional income to meet the rising expenses, one should also think of reviving the "Green Earth" programme by planting food crops around the house compound and cut down on fuel use by sharing vehicle for example.Regardless of the attitude or the actions that we take, as consumers the choice to live lavishly or prudently is in our hands.

Bank Islam funds Oil Palm cultivation in Kelantan

KOTA BAHARU, Nov 6 (Bernama) -- Bank Islam Malaysia Bhd (BIMB) is funding, to the tune of RM30 million, a Kelantan government-linked company's venture to develop a 3,200ha oil palm plantation at Lubok Bungor in Jeli.Menteri Besar Datuk Nik Abdul Aziz Nik Mat said Tuesday he hoped that this will enable Syarikat Ladang Sungai Terah Sdn Berhad (SLST), a subsidiary of the Kelantan State Economic Development Corporation, to expand more vigorously into agriculture."I hope the first phase of the people's plantation concept being undertaken by both parties will generate benefits to more people in Kelantan," he said at the 10-year loan facility signing ceremony here.Managing director Datuk Zukri Samat and loan division head Nor Azam M. Taib signed for BIMB while SLST was represented by director Mohamad Alwi bin Ya and general manager Zazali Japar. Also present was SLST chairman Datuk Omar Mohamad.Zukri said as the pioneer in Islamic banking in the country, BIMB aspires to increase its contribution towards the development of Kelantan in line with the East Coast Economic Region (ECER) masterplan recently launched by Prime Minister Datuk Seri Abdullah Ahmad Badawi."Among the factors behind BIMB's focus on the plantation sector are the escalating price of the commodity in the world markets and the diminishing supply in these markets," he added.

KFH eyes partners for IDR project

JOHOR BAHARU, Nov 6 (Bernama) -- Kuwait Finance House (M) Bhd (KFH) is looking for partners to develop the 249.6-hectare cultural and heritage zone in the Iskandar Development Region (IDR)."We are eyeing partners from Singapore, Japan, Middle East, Australia and China, in addition to the companies in this country to develop the site which was brought for US$300 million (US$1=RM3.35)," managing director, Datuk K. Salman Younis, told reporters after the launch of its awareness campaign here Tuesday.Johor State Economic Planning Unit director, Datuk Hamsan Saringat, launched the campaign.Younis said although the company has yet to work out the value of the partnerships they were expected to be worth billions of ringgit over the next 25 years."We will also work closely with two consortiums from the Middle East to develop the entertainment industry, education, healthcare and financial products in the region," he said.Younis said the development of the zone would be its initial project in the IDR before participating in the subsequent programmes in the region.He said the details on the partnerships would be unveiled in three months.Younis said KFH would work closely with the federal and state governments to ensure the success of IDR which would benefit the economy and people.Earlier, in his speech, Younis said the campaign aimed to introduce the bank to the people."We will hold similar campaign in key market centres throughout Malaysia," he said.He said KFH would set up a branch here, its first outside Kuala Lumpur, by the first quarter next year.

MMC secures RM2billion Saudi Port deal

KUALA LUMPUR, Nov 5 (Bernama) -- MMC Corporation Bhd today signed an agreement to acquire rights to jointly develop and operate Tusdeer Container Terminal (TCT), the third container terminal at Jeddah Port, Saudi Arabia, together with partners Saudi Industrial Services Company, Xenel Industries Ltd and Saudi Trade and Export Development Company.The new TCT will comprise three berths with a capacity of 1.5 million TEUs (twenty-foot equivalent units) and cost about SAR 2 billion (SAR 1.00=RM0.90), MMC said in a statement here.Construction is expected to begin in early next year and be fully completed by 2010, the company said.MMC group chief executive Feizal Ali said the deal will further expand the company's footprint internationally in the ports business and complement its strategic focus in Saudi Arabia and other countries in the Middle East and North Africa."We will leverage on our experience in developing and managing our two ports in Malaysia and replicate our success in one of the most dynamic regions in the world," he said.The deal will involve MMC acquiring the entire equity interest in City Island Holdings Ltd through its wholly-owned subsidiary MMC International Holdings Ltd.City Island currently owns the rights to jointly develop and a 30-year concession to jointly operate TCT until 2039, together with its Saudi partners.The deal comes exactly one year after MMC was awarded the rights to develop and manage the new US$30 billion Jazan Economic City in Saudi Arabia on Nov 5 last year.Jeddah Port is centrally located along the Red Sea, close to the southern entrance of the Suez Canal, one of the world's most important international waterways, which handles over 30 percent of global container trade.Feizal said MMC is optimistic about the opportunities brought about by Saudi Arabia's vibrant and rapidly growing economy as well as those in the surrounding region.He said the Red Sea region has seen strong throughput growth, with volumes increasing from 1.15 million TEUs in 1995 to 4.48 million TEUs in 2005, an average growth rate of 14.6 percent."Jeddah Port itself has seen strong throughput growth from both its hinterland areas as well as transhipment. This trend points to a need for Jeddah Port to expand to accommodate future growth. According to forecast, we are expected to break even in the third year of operations," he added.

M3nergy to Bid for US$1b of Projects Abroad

M3nergy Bhd, which recently proposed to dispose of its shipping arm to focus on the oil and gas industry, is looking to bid for more than US$1 billion (RM3.34 billion) exploration and production (E&P) projects overseas in the next 12 months. If successful, the projects are expected to contribute at least RM5 billion in turnover to the group in three to five years.
The company aims to leverage on its experience in the Floating Production Storage and Offloading (FPSO) and Floating Storage and Offloading unit (FSO) operations to enter into joint venture tenders with other oil and gas operators.Group managing director and chief executive officer Datuk Shahrazi Sha'ari said the company wants to move into more upstream oil and gas production-sharing contracts particularly in India, Indonesia and Thailand as well as look for opportunities in the Middle East. M3nergy embarked on its first E&P project outside Malaysia known as Cluster 7, off the coast of Mumbai, India, in March 2006. This was followed by a contract to develop an oil and gas block in Java, Indonesia, last March. Shahrazi told Business Times he was confident of securing more upstream projects as rising oil prices are driving new exploration and field development activities globally. He said there is a significant shortage of FPSO and FSO operators in the world thus placing M3nergy at a unique advantage to secure new contracts.Shahrazi said M3nergy plans to bid for a new FPSO and FSO project overseas as well as extend its existing FPSO and FSO contracts. The demand for floating production systems such as FPSO and FSO are on the rise as exploration moved to deeper waters and more distant locations. An FPSO is a type of floating tank system designed take all of the oil or gas produced from a nearby platform, process it, and store it until the oil or gas can be offloaded onto waiting tankers, or sent through a pipeline. An FSO is similar, but without the oil or gas-processing facilities. M3nergy, formerly known as Trenergy (M) Bhd, is the owner and operator of a fully integrated FPSO vessel called Perintis. The vessel is chartered to Petronas Carigali for a period of nine years ending in 2008.The company also operates a FSO vessel, the Puteri Cakerawala, which provides storage to gas platforms located off the coast of Kelantan in the Malaysia-Thailand joint development area.

Trade surplus grows 29.9% in Sept to RM11.45 billion

KUALA LUMPUR, Nov 5 (Bernama) -- Malaysia's trade surplus surged by 29.9 percent to RM11.45 billion in Sept from RM8.81 billion in August, marking the 119th consecutive month of trade surplus since Nov 1997, the Ministry of International Trade and Industry (MITI) announced Monday.Total exports in Sept were RM53.69 billion while imports were RM42.24 billion resulting in total trade of RM95.93 billion, MITI said in its preliminary release of Malaysia's External Trade Statistics for Sept 2007.The higher exports were contributed by particularly by exports of Electrical and electronic (E&E) products, transport equipment, crude petroleum as well as optical and scientific equipments.The ministry said compared with Sept 2006, exports in Sept 2007 rose 1.1 percent while imports declined 1.5 percent.When compared with August 2007, exports declined marginally by 0.3 percent while imports in September were lower by 6.2 percent, it said.MITI said strong trade performance was recorded in the third quarter of 2007 with exports grew by nine percent to RM158.06 billion from the second quarter while imports rose 6.1 percent to RM129.83 billion, the highest quarterly growth in 2007.For the first nine months of this year, total trade was RM810.47 billion, an increase of 1.8 percent from the corresponding period of 2006.During the same period, the ministry said, exports grew by one percent to RM441.19 billion while imports expanded by 2.9 percent to RM369.27 billion, resulting in a trade surplus of RM71.92 billion.